Multisectoral Water and Electricity Infrastructure Project

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The Multi-Sectoral Water and Electricity Infrastructure Project for Burundi development objective is to: (i) increase access to water supply services in peri-urban areas of Bujumbura; (ii) increase reliability and quality of electricity services; (iii) increase water supply quality and reliability in Bujumbura; and (iv) strengthen State Company responsible for Urban Water and Electricity Services (REGIDESO's) financial sustainability. The project will accomplish this by helping REGIDESO to restore its financial and commercial viability and the quality and continuity of services in the face of the increasing demand from individual consumers and economic agents. The project will be comprised of three components: (i) the electricity component, which will support urgent investments to rehabilitate the electricity supply system and reduce the supply/demand gap; (ii) the water component, which will support short-term investments to increase access to water supply, reduce losses and reinforce the capacity of the supply and distribution system; and (iii) the institutional component, which will support the strengthening of the capacities of both REGIDESO and MWEM. A quantitative analysis of costs and benefits of the Bujumbura water supply investment program yielded a net present value (calculated with a 12 percent discount rate) of US$0.7 million. The overall economic rate of return (ERR) of the urban water supply program is estimated at 13.0 percent. The ERR figures have been calculated on the basis of the following benefits: (i) incremental amount of water supplied, valued with water tariffs; (ii) consumer surplus; and (iii) cost savings resulting from the improved operating performances.